It's Time to Take Tesla's Troubles (and Musk's Distractions) Seriously

It is nearly sacrilegious to criticize Elon Musk, especially in a media ecosystem that hangs on his every word as though it came from a burning bush, rather than from the former co-founder of PayPal. However, as Tesla's challenges mount and Goldman Sachs analysts put a sell rating on the company's stock, it's worth asking:

That public relations savvy has paid off. Despite Tesla's ongoing production and profitability challenges, the company has a higher market cap than Ford Motor Company, even though Ford sold more than 6.6 million vehicles in 2017, while Tesla sold just over 100,000.

It's worth asking, are Tesla's troubles and Musk's tendency to deliver a bigger and bolder vision for the future an unrelated coincidence? Is it just an innovator musing aloud while simultaneously discovering that running a car company is really, really hard--or is it something else? The saga of Elizabeth Holmes and Theranos should tell us that the PR machine behind a celebrity founder aided by a swooning media can mask serious issues. In the case of Theranos, that combination effectively distracted the public and regulators from massive fraud, at least for a little while.

There is a reason why Elon Musk matters. America has always worshipped its business icons. Before Elon Musk there was Steve Jobs. Before Jobs there was Lee Iacocca. Before Iacocca there was Bob McNamara. Before McNamara, there was Henry Ford. Before Ford, John Rockefeller. Apart from President Kennedy's decision to hand over the controls to the Vietnam War to McNamara (whose analytics-based management of the war was, as you may know, an unmitigated disaster that quickly became a prolonged atrocity), we have not typically looked to CEOs as saviors capable of solving all of society's ills.

But with Elon Musk, it's different. All those CEOs who started wearing black turtlenecks in 2009 have nothing on Elon Musk fanboys. We have placed him on a pedestal so high a single tweet is treated like the Gettysburg Address. You don't have to look very far to find articles describing Musk as, more or less, the greatest human being who ever lived.

Elevating the Tesla founder from successful entrepreneur to demigod is understandable. It's not like our culture has an overabundance of admirable corporate and civic leaders to choose from. If Elon is more hype than reality, it would be a blow to a culture that needs more genuine heroes, specifically because so many of his goals and ideas really would make the world a better place.

However, that doesn't mean the media and regulators should avoid asking tough questions. Announcements of Tesla's production shortfalls are often followed by Musk announcing an even bigger, bolder plan than the one he announced the quarter before. I am just old enough to remember Enron announcing a derivatives market focused on weather futures and a partnership with Blockbuster Video right before it imploded.

Even if Musk's savvy PR isn't technically fraudulent, it still has the feel of a snake oil salesman distracting his audience with the skull of a jackalope after someone mentions that his cure for cancer appears to be ordinary water, with just a hint of lemon.

In other words, regulators, investors, and the media need to stop worshipping Elon Musk and start asking some tough questions about Tesla and his ability to manage the company. Just like curing serious illness shouldn't be left to a snake oil salesman, the goal of making affordable electric vehicles shouldn't be left to someone who can't get the job done.

And it increasingly appears like Elon Musk can't get the job done.

Published on: Apr 12, 2018

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